Treasury Wine Estates forced to deny Pernod approach

Penfolds producer Treasury Wine Estates has denied any approach for parts of its business from Pernod Ricard, after speculation of a possible deal saw its share price spike.

Treasury Wine’s share price rose by 15% on the Australian stock exchange after the head of Pernod Ricard’s wine arm, Jean-Christophe Coutures, said Treasury’s US wine assets were attractive.

Pernod Ricard is seeking to build scale in the US and last month agreed to acquire Kenwood Vineyards in Sonoma Valley, California.

Treasury, which has been considered a potential acquisition target since splitting from Foster’s Group in 2011, has faced repeated calls from some analysts to exit the US wine market following several years of weak return on investment there.

Coutures was quoted as saying Pernod would take a look at Treasury’s US assets, if they become available, but the firm is not actively seeking deals.

That forced a response from Treasury, which issued a statement saying it ‘has not been approached by, and is not in discussions with, Pernod Ricard’.

Treasury’s share price finished Friday at A$4.09, up 6.5% on the day before and marking a return to levels not seen since the end of February. The shares are still down 15% since the beginning of 2014.

Since last month, there has been speculation that Treasury Wine may announce job losses after its new chief executive, Michael Clarke, told market analysts he was planning ‘structural changes’.